Gold prices (XAU/USD) retreated from a recent record high reached earlier on Thursday, remaining subdued below the $2,300 threshold during the first half of the European trading session. The positive sentiment prevailing in global equity markets prompted profit-taking in the safe-haven precious metal, particularly given its significantly overbought status and the substantial upward movement witnessed over the past couple of weeks.

Nevertheless, the downside was mitigated by persistent geopolitical tensions arising from the ongoing Russia-Ukraine conflict and conflicts in the Middle East.

Simultaneously, the US Dollar (USD) continued its steep retracement from its recent peak, which was the highest level observed since February 14. The dollar’s decline for the third consecutive day reflects uncertainty regarding the Federal Reserve’s stance on interest rate cuts.

This trend may provide support to the gold price, constraining its downside momentum. Additionally, traders might adopt a cautious approach and refrain from aggressive trading activities ahead of the release of US jobs data on Friday. The Nonfarm Payrolls (NFP) report is anticipated to impact the Fed’s future policy decisions and could influence demand for the non-yielding yellow metal.

TECHNICAL ANALYSIS

From a technical standpoint, the daily chart reveals an extremely overbought Relative Strength Index (RSI), suggesting the potential for near-term consolidation or a moderate pullback before further upward movement.

In the event of a corrective decline, initial support is likely to emerge around the $2,280 level, followed by the overnight swing low near $2,265. Further downward pressure could drive the gold price below $2,250 towards the weekly trough, situated within the $2,229-2,228 range.

This area is considered a crucial pivot point, with a decisive break potentially leading to deeper losses and exposing the psychological support level at $2,200.

GOLD PRICE IN PAKISTAN HITS NEW PEAK AT RS241,100 PER TOLA

The price of gold in Pakistan has soared to unprecedented levels, with the benchmark 24-karat gold reaching Rs241,100 per tola in today’s trading session. This surge represents a substantial increase of Rs2,200 per tola compared to the previous session’s closing.

It’s noteworthy that the previous highest recorded price for 24-karat gold stood at Rs240,000, observed on May 10, 2023. Despite this new peak, gold has yet to surpass its all-time intraday high, which according to the Karachi Sarafa Association, is Rs242,700.

The current rally in domestic gold prices traces back to March, during which the precious metal saw a remarkable gain of Rs19,100, in alignment with the surge in international gold prices.

According to the association’s latest report, the price of 24-karat gold has reached Rs206,704 per 10-gram, marking an increase of Rs1,886 compared to the previous session. Similarly, the price of 22-karat gold has been quoted higher at Rs189,480 per 10-gram.

Gold, often regarded as a safe haven asset, closed yesterday’s session marking its seventh consecutive victory, fueled by strengthened hopes for a rate cut by the U.S. Federal Reserve and increased appeal amidst rising tensions in the Middle East.

As of the time of reporting, spot gold is being traded at $2,293.55, experiencing a slight decline of 0.28% or $6.5 on the day.

Federal Reserve officials, including U.S. central bank chief Jerome Powell, have continued emphasizing the need for further debate and data before any decision on interest rates. However, financial markets anticipate a rate cut in June, as reported by Reuters.

With the U.S. jobs report for March set to be released on Friday and new inflation data expected next week, market analysts suggest that the outcome of these reports could influence the potential for an interest rate cut, thereby impacting gold prices further.

“If non-farm payrolls meet expectations or indicate a weaker job market, this could increase the likelihood of an interest rate cut, which would be positive for gold,” Langford, an industry expert, commented.

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